Investment & Economy

Allocated gold refers to physical gold that is individually assigned to an owner, stored separately and does not enter the balance sheet of the custodian.

Allocation refers to the deliberate distribution of a portfolio across different asset classes – including precious metals – in order to bring risk and return into a desired balance.

A bonded warehouse is a state-authorised store in which goods can be held outside the EU's customs territory without import duties or import VAT becoming due.

Bretton Woods refers to the international monetary system established in 1944 that pegged the US dollar to gold and is named after the conference venue in New Hampshire.

Central bank purchases are the buying of gold reserves by national central banks to bolster currency reserves and as a strategic buffer against currency and systemic risks.

The cost-averaging effect describes the phenomenon whereby regular purchases of an asset with a constant amount automatically lead to a more favourable average price than the arithmetic mean of all individual prices.

A crisis currency refers to assets that are considered particularly stable in value during phases of economic or political instability and are therefore increasingly sought after.

Diversification is the practice of allocating capital across several asset classes, geographic regions or currencies so that the total risk carried by a portfolio is lowered.

A 1933 US legal order that forced private individuals to surrender gold to the Federal Reserve and banned private gold ownership for around 40 years.

Gold mining hedging describes the practice of gold producers selling future production via forward contracts at a fixed price in order to protect themselves against falling gold prices.

A gold savings plan is a regular investment model in which a fixed sum of money is invested in physical gold or gold-based securities at set intervals.

A monetary system in which the value of a currency is fixed to a defined quantity of gold.

Home storage refers to the physical safekeeping of precious metals by the owner themselves – in a safe at home, in a bank deposit box or at another self-chosen location.

Inflation protection refers to the ability of an asset to preserve or increase, in real terms, the purchasing power of the capital invested even when the price level rises.

The intrinsic value (also material or melt value) of a precious-metal item is the pure market value of the fine metal it contains, calculated from fine weight times the current spot price.

Shares in companies that mine precious metals or other raw materials, offering a leveraged exposure to the price performance of the respective metals.

The opportunity cost of gold is the forgone return that would arise if the capital tied up in gold were instead invested in interest-bearing or higher-yielding assets.

With a precious metal savings plan you regularly buy gold or silver for a fixed amount – the cost-averaging effect smooths out price fluctuations.

The real interest rate is the nominal interest rate adjusted for the inflation rate, showing the actual change in purchasing power that an investment produces.

Financing companies that provide mines with capital upfront and in return receive the right to obtain future precious metal production at a pre-fixed price or against a revenue-based fee.

A safe haven is an investment asset that retains or gains value during phases of economic or political uncertainty, while other asset classes fall.

Unallocated gold denotes a gold claim against a bank or provider that is not backed by an individually assigned, physically segregated bar or coin.

Wealth protection refers to strategies and instruments aimed at preserving the real value of assets against inflation, currency devaluation, crises and political risks.